The Barclays board has to explain why Bob Diamond, who must be seen as responsible in part for the rotten culture, can also be a credible reformer

Does the buck really stop with Marcus Agius? That’s the basis on which the chairman of Barclays Bank has walked the plank in an apparent attempt to save the skin of Bob Diamond, the chief executive. Agius explained that he is “the ultimate guardian of the bank’s reputation”.

Well, the chairman is certainly a guardian. But, come on, there are no hard and fast lines. Running Barclays Capital, Diamond’s job during the time of the Libor abuses, also involves a very large helping of guardianship. Indeed, the responsibility is more direct since Agius was a non-executive chairman.

Diamond presided over BarCap during what George Osborne called the “age of irresponsibility”. Part of Diamond’s job was to ensure, on a day-to-day basis, that traders did not break rules in pursuit of bonuses. He would seem to have failed comprehensively in that task. As Agius’s resignation statement put it, “unacceptable standards of behaviour” have “dealt a devastating blow to Barclays’ reputation”.

That language, belatedly, gets closer to recognising the seriousness of the Libor scandal – last week’s talk of “inappropriate” behaviour was an absurd understatement. Having now acknowledged the need for a root and branch review, the Barclays board has to explain why Diamond, who must be seen as responsible in part for the rotten culture, can also be a credible reformer. In most organisations, that notion would be laughable.

The Barclays board feels the bank is an exception, one suspects, because it doesn’t have an alternative chief executive in the wings. BarCap has come to dominate Barclays in terms of profit contribution and life without Diamond seems too much of a wrench. The non-executives may be hoping to inspire a “Save Bob” campaign among shareholders who fear even more damage would be done to the share price if the chief executive departs. Events are moving quickly. The government on Monday announced a parliamentary inquiry into the Libor scandal and Diamond appears before the Treasury select committee on Wednesday, an event that will determine his short-term future. The inquiry, led by the committee’s Conservative chairman, Andrew Tyrie MP, will have until Christmas to examine “conflicts of interest, culture and standards in the banking industry” but the big questions for this week are: what did Diamond know about the shameful Libor practices and when?

Remember, there were two stages to the affair. In the first, Diamond maintains that only “a small number of people” were involved and points out that the authorities found no evidence to implicate anybody above the level of trading desk supervisor. That account leaves open the question of why Barclays’ management systems could be bypassed.

The second stage, during the credit crisis of 2007 and 2008, is more problematic. The FSA said “senior management” – not named — wanted Libor submissions to be lowered to present a more flattering picture of the rate at which banks were willing to lend to Barclays.

The twist in this part of the tale is that Diamond discussed Libor on the phone with Paul Tucker, deputy governor of the Bank of England. The Bank denies that any nods or winks were given to lower the submissions. Will Diamond challenge that assertion?

If he doesn’t, he will have to explain how the “miscommunication” – as the FSA put it – could have arisen that Barclays was somehow allowed to fiddle its submissions. If the misunderstanding arose as a result of Diamond’s phone call, what did he tell his underlings? Did he check that any instructions he gave were being followed? Was he monitoring the Libor submissions himself, which would be reasonable for a chief executive to do if the issue was deemed so important that it was talked about with Tucker?

These are detailed questions – and Diamond’s detailed answers may determine whether he follows Agius out of Barclays this week.